What are deferred tax assets and deferred tax liabilities? Socially Responsible Funds. At December 31, 2013, the account balances of HD Services showed a deferred tax asset of $120 million before assessing the need for a valuation allowance and income taxes payable of $80 million. Of the following temporary differences, which one ordinarily creates a deferred tax asset? CSIF Balanced, Equity, Enhanced Equity; Capital Accumulation … Companies use tax deferrals to lower the income tax expenses of the coming accounting period, provided that next tax period will generate positive earnings. For example, a company that pays a tax rate of 35% depreciates its equipment that has a value of $25,000 and a life of 5 years. An entity reported deferred tax assets and deferred tax liabilities at the end of the prior year and at the end of the current year. Solved D Question 3 4 pts Which of the following temporary Deferred tax assets are created when profits, according to the tax documents, are greater than profits according to the company books.